Only 12 months ago, reeling from an accounting scandal that shook UK business, Tesco unveiled the biggest loss in its history.

Last week, Tesco reported its first rise in quarterly UK like-for-likes in three years (0.9%) and it is back in the black for its full year with a profit of £162m. The numbers alone are unspectacular but, given the recent history, unspectacular is quite an achievement in itself.

The question after a year of rebuilding is, has Dave Lewis restored Tesco’s fortunes?

Aside from the fact that the marketplace has changed beyond all recognition, and it is almost impossible to envisage any single grocer dominating in the way Tesco did a decade ago, the answer, as always, is more nuanced than a simple yes or no.

Tesco is perennially likened to a huge oil tanker, close to unstoppable when it has a head of steam but slow to manoeuvre and turn. In Lewis’s first full year at the helm he has begun to correct Tesco’s course.

At the heart of this has been control of the company’s cost base and reinvestment in service. And while further restructuring will undoubtedly continue, the grocer has a senior team in place with far greater clarity around the core focus day to day.

Lewis’s critics suggest that his strategy has amounted to little more than cost cutting so far, a direction that is manifesting itself in profit numbers that are a fraction of what they were only four years ago.

There are also well-founded concerns that in a world where Aldi and Lidl’s business models are set up to win on price, Tesco cannot regain its former glories without finding more creative ways to win back customers in the

long term.

Creative challenge

Yet that view does a disservice to the scale of the challenge Lewis faced only a year ago when every stakeholder group, including customers, suppliers, shareholders and employees, wondered if there was any long-term future for the business.

It was a legitimate fear until Lewis got Tesco’s balance sheet and governance under control and began to address its competitiveness on price with the discounters.

Lewis has continued to keep his counsel on his long-term vision for Tesco, preferring to allow the business performance and returning customer numbers to do the talking.

However, while last week’s return to growth may represent a watershed, the past 12 months can only be seen as the start.

A return to basic good practice will not be enough to attract shoppers back in their droves and, now the fundamentals are in place, Lewis will be under pressure to outline how he sees Tesco’s proposition developing and how he intends to define the retailer’s future.